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WASHINGTON (AP) – The Biden administration agrees to provide up to $8.5 billion in direct funding and $11 billion in loans to Intel for computer chip factories in Arizona, Ohio, New Mexico and Oregon. reached.
President Joe Biden is scheduled to visit Intel’s campus in Chandler, Arizona, on Wednesday to discuss investments in what could be a crucial battleground state in November’s election. He has frequently said that not enough voters know about his economic policies, suggesting that more voters would support him if they did.
Commerce Secretary Gina Raimondo said the agreement reached through her department puts the United States in a position to reach 20% of global production of cutting-edge chips by 2030, up from the current zero level. The United States designs advanced chips, but the inability to manufacture them domestically has emerged as a national security and economic risk.
“Failure is not an option. Cutting-edge chips are at the core of our innovation system, especially when it comes to advances in artificial intelligence and military systems,” Raimondo said in a call with reporters. “We can’t just design a chip. It has to be made in America.”
The funding announcement comes as the 2024 presidential campaign heats up. Mr. Biden has told voters that his policies have helped revive U.S. manufacturing and increase jobs. His message is a direct challenge to former President Donald Trump, a likely Republican candidate who raised tariffs during his time in the White House and plans to do so again on a promise to protect American factory jobs from China. .
Biden narrowly defeated Trump in Arizona in 2020, 49.4% to 49.1%.
A poll conducted in February by The Associated Press-NORC Center for Public Affairs Research found that American adults have a negative view of Biden’s economic leadership, with just 34% supporting him. The lingering effects of inflation, which reached a 40-year high in 2022, are hurting Democrats, whose approval rating for the economy was 52% as of July 2021.
Intel’s project will be partially funded through the bipartisan CHIPS and Science Act of 2022, amid concerns that loss of access to Asian chips post-pandemic could push the U.S. economy into recession. The Biden administration helped pass the bill through Congress.
In pushing for investment, lawmakers expressed concern that China is trying to take control of Taiwan, which accounts for more than 90% of advanced computer chip production.
Ohio Democratic Sen. Sherrod Brown, who is up for re-election this year, said Intel would create thousands of jobs and make his state a “world leader in semiconductor manufacturing.” Brown will face Republican Bernie Moreno, a Cleveland businessman and supporter of President Trump, in November.
Wednesday’s announcement is the fourth and largest to date under the Chip Act, with government support expected to allow Intel to make $100 billion in capital spending over five years. About 25% of that will be for buildings and land, and about 70% will be for equipment, according to Intel CEO Pat Gelsinger.
“We believe this is a defining moment for America, the semiconductor industry, and Intel,” Gelsinger said, calling the CHIPS Act “the most important industrial policy bill since World War II.”
Intel’s CEO said on a call with reporters that he would like to see a sequel to the law in 2022 to provide additional funding to the industry.
Biden administration officials have said that without government support, computer chip companies will not invest domestically on the scale expected. Intel’s funding will create 30,000 jobs in manufacturing and construction. The company also plans to claim a tax credit of up to 25% from the Treasury on eligible investments.
The Santa Clara, California-based company plans to use the funding in four different states. In Chandler, Arizona, the funding will help build two new chip factories and modernize an existing one. The funding will support the creation of two advanced factories in New Albany, Ohio, just outside the state capital, Columbus.
The company also plans to convert two factories in Rio Rancho, New Mexico, into advanced packaging facilities. Intel also plans to modernize its facility in Hillsboro, Oregon.
The Biden administration has also made employee training and access to affordable child care a priority in deals to help businesses. Under the agreement with the Department of Commerce, Intel will work on local training programs and increase reimbursement for child care programs, among other initiatives.
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